Savers face two-year de­lay to tap pen­sions

The Daily Telegraph - Business - - Front Page - By Jes­sica Beard

57 Age at which peo­ple will be able to ac­cess their pri­vate pen­sions from 2028, in line with a ris­ing state pen­sion age

SAVERS plan­ning to dip into their pri­vate pen­sions at the age of 55 will be forced to wait an ad­di­tional two years from 2028, the Gov­ern­ment says.

Any­one aged 49 and un­der must now wait un­til they are 57 be­fore be­ing al­lowed to ac­cess their pen­sions with­out in­cur­ring sig­nif­i­cant and pro­hib­i­tive tax charges.

As it stands, savers can with­draw money from their pen­sion pot at 55 in any way they like, in­clud­ing tak­ing 25pc of their sav­ings tax-free. How­ever, the age re­stric­tion is in­tended to be 10 years be­hind the state pen­sion age – cur­rently 65 but ris­ing to 66 this Oc­to­ber, and to 67 between 2026 and 2028. Age lim­its ap­ply as the Gov­ern­ment pro­vides tax re­lief on money saved via a pen­sion on the ba­sis it is not used be­fore re­tire­ment. Sav­ings can be with­drawn pre-55 but tax re­lief must be paid back.

The Gov­ern­ment con­firmed the new time­line in an an­swer to a writ­ten Par­lia­men­tary ques­tion from Labour MP Stephen Timms.

John Glen, Trea­sury min­is­ter, replied by say­ing the shift to 57 would re­flect ris­ing life ex­pectancy, in line with the state pen­sion age.

“[It will en­cour­age] in­di­vid­u­als to re­main in work while also help­ing en­sure pen­sion sav­ings pro­vide for later life,” he said. “[This change has been made] well in ad­vance to en­able peo­ple to make fi­nan­cial plans.”

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